The Indian government frequently touts improvements in the “ease of doing business,” but a frustrated entrepreneur’s recent Reddit post sharply challenged this narrative, highlighting the crippling bureaucracy involved in exporting directly to international customers (B2C exports).
Ease of doing business vs reality
In a post titled “Why you should not try exporting from India Vent & Rant,” Reddit user Limp-Question-4778 detailed his four-year ordeal, declaring, “All the talk of ease of doing business is just talk and no walk. You are better off moving to Dubai and exporting from there than from India.”
The entrepreneur, from a small Indian village, initially found success domestically, handling between 300-400 daily orders. His troubles began when international customers showed interest in 2022. The complicated requirements he faced included obtaining an IEC Certificate, registering on ICEGATE, securing an AD code from the bank, and mandatory shipping through licensed couriers—procedures he described as “nonsensical for a $30 export.”
Punished by GST twice for a rejected shipment
The situation worsened when a customer rejected a shipment, prompting the Indian government to levy GST charges twice—once for the outgoing shipment and again for its return. “We had to pay GST TWICE on a shipment on which we did not earn a penny,” he wrote, highlighting how punitive rules burden small businesses.
Further complications arose from a document called CSB 5, a mandatory shipping bill exporters must retain. Due to poor integration between Customs, GST, and RBI systems, in 2024 he discovered approximately ₹50 lakh worth of “open” shipping bills. Closing each incurred a fee of ₹400, totaling ₹8 lakh—roughly 16% of his turnover. Unable to meet the tight deadline, RBI marked his account non-compliant, freezing it and effectively ending his export operations.
Silence from the authorities despite repeated appeals
Frustratingly, repeated attempts for assistance from regulatory bodies went unanswered. The entrepreneur wrote numerous times to RBI and even provided detailed diagrams explaining his situation to Commerce Minister Piyush Goyal’s office—only to receive silence in return.
ITC claims trigger bureaucratic nightmares
Small businesses frequently avoid claiming Input Tax Credit (ITC) due to fears of triggering a GST audit and harassment. As the entrepreneur bitterly noted, “We honestly don’t have the funds, people or stamina to deal with one more bureaucratic nightmare.”
India vs. UK: a stark comparison
Highlighting India’s bureaucratic absurdities, he contrasted his experience setting up a UK-based business remotely: “I can set up a UK-based company & bank account in 2 days… sitting in India, I can’t set up a company in 2 months despite bribes.”
He lamented the lost employment opportunities for over 50 rural women whose lives had improved through his business. Forced closure due to bureaucratic hurdles meant these workers returned to their previous hardships.
